About The Loonie Adventures of a Forex Noob

“Huck loves her bucks!” I always say. The problem, of course, is how to make those bucks!! In this blog, I'll be posting my adventures as I traverse the forex world, while trying to catch some pips along the way. To do this, I will make use of classical charting methods as well as develop my own mechanical system. Not only will I talk about FX, but I'll also share how my day went along with any currency trade updates. Hopefully, by the end of this tale, I'll be able to achieve my goal of becoming a consistently profitable foreign exchange trader.

GBP/USD: A Bearish Trend Forming? – Trade Closed

Major ouch! As it turns out, my “I’m no quitter” attitude didn’t work out to my advantage this time around. I shorted GBP/USD again only to suffer a 1.0% loss!

Risk appetite picked up on Friday and yesterday as equities retraced some of their losses from last week. I admit, I started feeling nervous when my sell orders got triggered at the 50% (1.6230) and 61.8% Fib levels (1.6250).

But my stubborn self thought that 1.6300 would hold. After all, price just consolidated around the major psychological handle and a bearish divergence materialized.

I was wrong.

Buyers outnumbered sellers and Cable shot past 1.6300 and stopped me out of my trade at 1.6350. As a result, my GBP/USD ended with a 0.5% loss.

Definitely NOT lovin’ this feeling right now. But I guess I always have another week to get back in the green.

Trade Update: 2011-8-11 1:58

Oh yeah! I didn’t get my heart broken on Cable this time around. Well, kinda. I took profit on half of my position at 1.6200 but I moved my stop way too early! My remaining position got stopped out at breakeven.

I have no regrets though. I had to leave for work (boo hoo) so I thought I’d play it safe because I had no way to adjust my trade. And besides, I didn’t know what more to expect from King’s speech. As it turns out, he announced downward revisions to the U.K.’s growth and inflation outlook.

Because I’m not the kind of girl who gives up without a fight, I’m gonna try to jump in on the downtrend again today! Although we don’t have any third-tier event from the U.K. to serve as a catalyst, I think that there’s still enough risk aversion to go around and send higher-yielding currencies lower.

Here’s my plan:

Short GBP/USD with two positions: one at the 50% (1.6230) Fib and another 61.8% (1.6250) Fib. Profit target at the minor psychological handle and near the previous swing low at 1.6050. Stop loss above yesterday’s high at 1.6350.

The technical setup looks nice, right? So basically I’m gonna wait for the pair to test resistance at the falling trend line. If my plan works out and resistance at the Fib levels hold, we would most probably see a bearish divergence.

Keep your fingers crossed for me, please!

Trade Idea: 2011-8-10 3:00

In this girl’s humble opinion, Cable is about to trend lower as it has been making “lower highs” since the beginning of the week. More importantly though is the break of the bottom of the range. With Cable making a new low yesterday, I expect more losses for the pair.

I’m ultimately aiming for new lows, around the 1.6100 region. However, I don’t want to be TOO greedy so I’m going to take half my position off at 1.6200. This allows me to secure profits and not miss out on a strong move. As for my stop, I placed it just above the Asian session highs today.

I know, I know. The dollar got sold off yesterday after the dovishFOMC statement. However, I think that the rebound that we saw in dollar pairs was nothing more than just a pull back.

Heck, wasn’t it just yesterday that the country’s trade balance and manufacturing reports came in worse than expected?

The BOE will also release its Quarterly Inflation report. Looking back at the CPI figures from April to June, I noticed that the headline figure missed the forecast two out of three times. With that said, I’m anticipating we won’t see a lot of hawkish remarks in the report.

To recap, here’s my plan:

Short at market (1.6270), pt1 at 1.6200, pt2 yet to be determined, and stop loss at 1.6340.

Once price hits my first profit target, I’m gonna move my stops to breakeven so it becomes a risk-free trade. If I’m lucky, this trade will turn up like my EUR/USD setup.

There ya go, that’s my trade for today. What about you? Hit me up with your ideas on Twitter (@LoonieAdventure) or Facebook. You can also write your ideas in the comment box below. May the pips be with us all!

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